Chicago’s very own Groupon hits the cover of Forbes this month. At less than 2 years old, and an estimated $500 million in revenue in 2010 (and profitable), it’s plain awesome to see an incredible business with an incredible business model get this type of attention.

Jimmy Chan

The perfect business model for the web. An actual way to make money using social networking. Kudos to them!

Scott

on 12 Aug 10

Kudos to Groupon. It’s a good idea that is novel and easy to explain to advertisers. Groupon certainly makes money.

The question is, do their clients profit? Advertisers make additional revenue from the deals, but as the story mentions with the discounts they barely break even. And once I’ve experienced the activity, am I likely to go back? Especially since I now need to pay twice what I did last time?

David

on 12 Aug 10

Interestingly enough, Scott, a local business I frequent just put up a sign saying they were no longer honoring Groupon coupons due to “frequent customer abuse” and apologized that a few bad apples were forcing them to make that call.

While an anecdote is not data, it does make me question how the deal works out for clients.

Anonymous Coward

on 12 Aug 10

Good one.

Dude

on 12 Aug 10

So tired of them inflating their revenue because they take all the money first before handing 50% off to the merchant. With a 50% cut groupon is on target to do 250MM which is still amazing and more amazing that they’ll pay out that much to merchants. But 500MM in revenue would make them a 2.5 Billion dollar company not the 1+ billion dollar company that they are. Sure the inflation is nice for getting press but its slightly misleading

James

on 12 Aug 10

It will be interesting to see how Groupon fares with aggregators like http://www.dailydibs.com and thedealmap.com and others popping up. Lots of deals to be had.